Converter Outlook, Part 2 (CONT’D FROM PAGE 1)
integrated brothers have worked very hard to close mills and take downtime to balance supply and demand and now a few weak links are caving. “Most likely, the weak in this new era will fold as they will get to enjoy all that equipment they ordered coming in six months or even a year with no business to support it because they never built their own professional sales team or a professional well-fortified company. The folks that were farming business out to them are reeling that business back in and too bad, so sad! “Now that we are doing what the box business does so well — chop prices — I think there will be great opportuni- ties for those who got prepared for Jerry’s ‘Golden Years’ to end. There are fantastic opportunities in this market. There will be some choppiness (no pun intended) to the economy in the next six months yet as we balance out the inventory bloat, we should return to yet again, new normal. Something like a 1-2 percent growth in the second half is what I see in the second half of 2023. “Of course, we could get a new ‘Double Inflation Bill’ passed or Boy Putin figures out a way to mess up a free lunch, yet barring any more stupidity in the political land- scape and in the geopolitical landscape, we should be turning our 'Box Recession' around in the second half of the year. This is when produce season starts again and the buildup for holiday begins. “Our U.S. consumer is beat up a bit but not down. Cred-
through. So, Mr. Transitory Powell woke up and realized inflation created by free money created a buying frenzy and raised interest rates to cool down the fire. This was too much too fast and it has caused the effect he wanted, which is a slowed economy. “The box business (something that predicts the econ- omy) was slowing way back in March, but he missed that barometer and waited a bit more and started throwing wa- ter on the fire as fast as he could. This truly effected the economy as did the switch from stuff to services and what we have now is a drop in demand for boxes. So, what I see is a very bumpy first six months of next year. “I was counting on a reduction in containerboard prices in the first quarter, but it seems we have panic in box land and the weak unprepared companies that did not build their balance sheets, improve their people’s skill sets, sup- plied others’ their boxes and balance their investments in capital equipment purchases are doing what very weak and anemic companies do — chop prices. Oh, am I al- lowed to say that? Oops, I did. So here we are! “What is wild to me is that this reaction is not that of the large integrated companies but more so the indepen- dent companies that mooched off the big guys because they have no sales acumen and now have to feed their machines with their own business, as most of what was there yesterday is gone today and will be tomorrow. Our
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January 16, 2023
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